Anthropic CEO Dario Amodei has reportedly resumed negotiations with the US Department of Defense in a last-minute bid to preserve the company’s access to Pentagon contracts, as it risks being labeled a supply-chain security concern by the Trump administration.
According to a Financial Times report citing people familiar with the matter, Amodei has been in talks with Emil Michael, the US undersecretary of defense for research and engineering, to finalize terms governing how the military can use Anthropic’s artificial intelligence models.
A new agreement could allow the Pentagon to continue using Anthropic’s technology and help the company avoid a formal designation that would require defense contractors across the supply chain to cut ties with the AI developer.
The renewed discussions come after negotiations broke down sharply last week. Michael allegedly called Amodei a “liar” with a “God complex,” and the talks collapsed after both sides failed to agree on language Anthropic said was needed to prevent potential misuse of its AI systems.
Dispute centers on bulk data analysis clause
In an internal memo to staff obtained by the Financial Times, Amodei said that toward the end of negotiations, the Pentagon offered to accept Anthropic’s broader terms if the company removed a clause restricting the “analysis of bulk acquired data.” According to Amodei, the clause was intended to guard against the risk of mass domestic surveillance — a scenario the company considers a red line, along with the use of AI in lethal autonomous weapons.
The dispute intensified after Defense Secretary Pete Hegseth warned that Anthropic could be designated a supply-chain risk, a move that would effectively shut the company out of US military procurement networks.
The standoff occurred despite Anthropic’s established links with the defense sector. In July 2025, the company secured a US Defense Department contract worth up to $200 million and became the first AI provider whose models were approved for use in classified environments and by national security agencies.
According to a previous Cointelegraph report, the US military even used Anthropic’s Claude AI model to assist a major airstrike on Iran just hours after President Donald Trump ordered federal agencies to halt the use of the company’s systems.
Tech groups warn risk designation could harm US AI leadership
In a letter sent to Trump on Wednesday, several technology groups cautioned that labeling a domestic AI firm as a supply chain risk could weaken the United States’ position in the global AI race. The organizations argued that treating a US technology company “as a foreign adversary rather than an asset” could discourage innovation and undermine the country’s ability to compete with China.
The letter was signed by the Software & Information Industry Association, TechNet, the Computer & Communications Industry Association, and the Business Software Alliance — organizations that collectively represent hundreds of American tech companies, including AI chipmakers Nvidia, Alphabet’s Google, and Apple.
